How Real People Earn a Side Income with Amazon and eBay

A few years ago, Sandy Smith of YesIAmCheap.com entered an online challenge proposed by another personal finance blogger. The contest worked like this: Each participant would invest $1,000 for the duration of 2014 through various strategies. At the end of the year, whoever earned the greatest return would win bragging rights.

Smith told me that, at first, she was torn on how to invest her money. Eventually though, she set out to prove that a side hustle could out-earn any stock that was out there.

So, while some in the challenge invested in individual stocks or peer-to-peer lending, Smith split her $1,000 initial investment into three buckets – $250 into Lending Club (a peer-to-peer lending firm), $250 into a “green” stock, and $500 into a side hustle that was, at that point, to be determined.

After mulling over her options, Smith chose to invest her $500 into a soon-to-exist Amazon drop-ship business where she would design and sell fancy cellphone covers.

By the end of the year, Smith was absolutely right. While her $250 Lending Club investment netted her a 10.37% return and her “green” stock went in the red to the tune of a nearly $100 loss, the profits on her new business soared to $5,119.78 for that year. That’s money Smith made after investing the initial $500 into inventory and setting up her business, then reinvesting her profits to buy more inventory over and over.

That’s also a return of more than 1,000%.

Ever since then, Smith says she’s basically been hooked on making money with Amazon. While she sells all sorts of merchandise on Amazon, she is well known for designing T-shirts and coffee mugs that sell like hotcakes. She even designed the famous “Nasty Woman” mug that was used in an SNL skit during the tumultuous 2016 Presidential elections.

Smith also offers a few different courses and the occasional free webinar to teach others the intricacies of making money using various Amazon strategies. She just had her first child and, thanks to her hard work, she can enjoy some time at home with a new “job” she can do from anywhere.

Other Ways to Make Money with Amazon and eBay

Obviously, Smith isn’t the only person out there earning cash on the side using popular websites most of use to spend money. Over the years, we’ve profiled people who buy used items and resell them on Craigslist or other sites – or people who focus on procuring specific antiques or electronics to buy low and sell to the highest bidder.

But, new online hustles are sprouting up all the time. Jason Butler, the blogger behind The Butler Journal, is another good example of someone who uses a popular website to earn some money on the side. But Butler’s website of choice isn’t Amazon — instead, he’s built an empire selling items on eBay.

While his strategy is more nuanced than we could probably cover in a single article, the gist of it is this: Butler purchases items from thrift stores and yard sales, and resells them on eBay.

But, he doesn’t just buy and sell anything. “Since I’ve been doing it for a while, I know what items will sell,” he says. “My biggest sellers are jerseys, tennis shoes, dress shoes, and bobble heads.”

Once he stumbles upon an item he thinks will sell, Butler says he checks the eBay app to see if a similar item has sold recently – and if so, how much someone paid. At that point, he decides if the potential profit margin for the item is worth it.

“If I can make a 2-3 times profit on what I spent on the item at the thrift store, I usually get it and list it on eBay,” he says.

Butler says the process isn’t overly complex; you just have to make the right decisions – and sales – over and over and over again. Right now, he’s spending around three hours per week searching for hot items, listing them on eBay, and shipping them at the post office. During the 12 hours per month he spends, he says he averages a profit of around $250 after expenses.

Like Smith, Butler also offers a course on how to start an eBay side hustle. I guess if you have the entrepreneurial spirit, it can be applied to any idea – whether that’s selling jerseys and bobbleheads or selling your knowledge to others.

Tyler Philbrook is another blogger we spoke to who sells stuff online, but he uses a program called Amazon FBA (Fulfilled by Amazon) to make his side hustle dreams come true.

“What it means is, you send your products directly into Amazon and they store it in their warehouse,” says Philbrook. “When a customer orders from you, Amazon sends the item to them [with free two-day shipping for Prime members], and will deal with any customer service issues if they arise.”

Philbrook says his basic strategy is going to clearance racks inside of Target, Walmart, Walgreens, and other stores that provide tons of inventory he can buy cheap and sell for double the price or more. He looks for interesting items that are clearly marked down but also valuable and frequently sold online. And sometimes, the weirdest things bring in the biggest profit.

“My biggest strategy is to check everything even if you don’t know what an item is or does,” says Philbrook. “I just picked up some audio something for $240 and will sell it for $499. I have no idea what it does, but it’s still going to make a nice amount of profit.”

Philbrook says that, at the time being, he’s pulling in around $1,000 per month in profit for 12 to 14 hours per week. If he spends more time in the future, he believes he can earn a greater return.

Is an Amazon or eBay Side Hustle for You?

If you’re thinking of running out to a garage sale to rummage around for items you can sell for cash, you might want to read up on a few strategies before taking the plunge. Philbrook and Butler both agree turning a profit online isn’t as easy as it looks.

According to Philbrook, one of the biggest problems with either an eBay or Amazon hustle is the fact you have to spend money to make money. And if you buy the wrong items, you could be left holding the bag – or unwanted collectible, as it were.

“I sometimes spend $500 or more at one time, and that money won’t be coming back to me for at least a month,” he says. “If you don’t have enough capital to pay your bills, don’t spend it on inventory.”

Then there are the scams to worry about, specifically with eBay. Over the years, there have been complaints about scams and buyers trying to finagle free stuff out of sellers. Usually, a buyer threatens to leave negative feedback on a seller’s page but promises not to do so if they get a full refund.

Butler says these things absolutely happen, but you can minimize bad experiences if you know what’s going on. The website also has safety measures to prevent fraud, he notes. “For example, they want transactions to only happen on eBay. If someone messages you asking can they just PayPal you the money for an item, don’t do it.”

If you do, notes Butler, they can send you the money, receive the item, and then do a chargeback via PayPal. “You’re protected from things happening like that on eBay,” he says.

A final pitfall to be aware of is the fact that many people assume these hustles are easy and don’t do the leg work first.

“People think you can just find something, post it, and it will sell,” says Butler. But, there’s more to it than that. You have to find the right items to sell, take great pictures, come up with good titles, and write accurate product descriptions, he says.

Researching your items is also very important because, like it or not, even some great products just don’t have a market on eBay.

The Bottom Line

If you’re looking for a way to make money that doesn’t involve a traditional part-time job, it helps to know people are out there coming up with new and interesting ways to earn cash on the side. Some would even say that a resale side hustle is the perfect side job. After all, you can work any hours you want, you don’t have to sit in an office, and all the profit is yours.

Before you dive in, however, you should read more about eBay and Amazon side hustles to figure out what you’re getting into. Also, don’t start buying or selling anything until you have a plan.

If you jump in too early and start buying inventory to sell, you could wind up with boxes of “stuff,” hundreds or even thousands of dollars of losses, and not much else to show for it.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.